Help with finance/ case study review/3pages The paper should consist a brief description of the case, an explanation of the problem, alternative solutions, your recommendations, including materials, such as spreadsheets, needed to justify your recommendations. And these questions should be answered, HAG's Singapore Note Issue: 1. What is the st at which HAG is borrowing through the Singapore note issue (ignore taxes)? 2. What is the likelihood that HAG will be downgraded within a year from its B rating from Standard & Poor's?

3. Is the level of borrowing of HAG, after the note issue, going beyond the optimal level of borrowing? 4. How will the risk to HAG's equity be affected by the issue? Will the stock price go down? Is it time for the brokerage firm to offload its equity holding in HAG? HAG's Singapore Note Issue.pdf CASE STUDY REVIEW Name of Student Institution affiliation INTRODUCTION The case is about the HAG’S Singapore notes issue, and it entails this company that got based in Vietnam issuing US $ 90 million of 9.875 senior notes. Which were due in 2016, the company went ahead and estimated the net proceed from this particular offering. After which it had made some deductions on commissions, underwriting discounts as well as other expenses that were payable in connection with the offering that was estimated at US $ 80.7 million. The HAG was one of the companies that got listed in the Vietnams stock exchange.

It majored in real estate that mainly focused on the development of the residential as well as commercial properties in the Ho Chi Minh City. HAG borrows trough the Singapore notes issue, and it does this mainly through short-term borrowings that grew from the Vietnam dong as well as long-term loans. Some of the ways in which the various loans get obtained is usually through the Vietnamese bank lending. Which get used in financing some of the projects that include things like, hydropower, property and most of all some of the terms projects that last for periods of one year to 72 months. Another method is through the use of straight bonds, which get issued concerning Vietnamese songs that tend to pose a principal amount of 650 billion(Zuziak, 1993).

The various bonds get issued in terms of tranches. There is also the use of convertible bonds, and they get usually placed in terms of zero coupon convertible bonds that tend to have a principle amount of Vietnamese dong amounting to 1,100 billion. The unconverted bonds tend to bear a coupon that get usually determined by the average one-year savings, with deposit interest rates for those individuals who get often quoted by the Asian commercial joint stock bank. The table below shows some of the various borrowings done by the HAG company, also its equity and its total borrowings before and after the issue. VND Billion As at December 31,2010 After the issue cash 3,,551 convertible bonds 1,,100 short-term loans 1,,733 long-term loans 1,573 long-term VND bonds 1,,630 bank loans 1,,800 total borrowing 6,,836 equity 9,,158 The likelihood that HAG will get downgraded within a year from its B ratings of the standard.

As well as poor is that, there were some risk factors that were considerably affecting the vitality of the company’s cash flow as well as the real estate outlook for the Vietnam market. Also, the number of parties that got involved in matters concerning the property development tend to outlay the size of the available capital. It usually tends to pose numerous difficulties to developers, and they are not easily changed once set. The developers will not have an opportunity to adjust their plans as well as relocating their resources in a bid to try and adapt to the changing market conditions. Also, the borrowings of the HAG company were to any in the sense that when attempting to repay the loans.

It would deplete almost all their resources that then will lead to the downgradment of its ratings. The level of borrowing after the notes issue did not go beyond the optimal loan level as there was, the purchasing of all or any part of some f the holders notes. It was a very vital step, and this made HAG offers cash that was almost equal to 101 percent of the aggregate amount of notes that got repurchased. Also, the company had an opportunity to redeem up to 35 percent of the principal amount, and this made it become a bit independent. There was the possibility of the company making some vital predictions on some of the rating changes that were made basing on the financial data of the enterprise.

The risk to HAG equity will get affected by the issue positively, as the number of borrowings will get reduced. Hence making the company a bit stable in its financial dealings, the number of debts will get reduced as well the rate of commercial borrowings. The stock price will escalate since the company will have some worth in terms of the profits it acquires from its financial dealings. It is not the time for the brokerage firm to offload its equity holding in HAG.I t is usually because, the company has started to regain strength to come back t its feet. It is not yet ready to face all the hard as well as the harsh environment alone at the moment(Morton, 1933).

CONCLUSION Some alternative solutions that the HAG company will incorporate are those of, cutting on its expenditures. So as to try and avoid maximum borrowings, also, it can engage in numerous side activities that might act as channels of income generation. These will play a very vital role that might bring about more money that will get used to finance all of its projects hence limiting the instances of borrowings. Keeping an appropriate financial record so as to gauge the spending rates will help the HAG Company in trying to monitor its financial dealings. References Morton, J.

B., & Whistler, R. (1933). Hag's harvest . London: Heinemann Ltd. Zuziak, Z., & Międzynarodowe Centrum Kultury w Krakowie. (1993). Managing historic cities .

KrakoÌw: International Cultural Centre, Cracow. 0